Did you know that small U.S. businesses created a whopping 1.9 million new jobs in 2015? Or that in the third quarter of 2016 alone, they created another 872,000 new jobs?
Small businesses are crucial to the U.S. economy, contributing to the lower unemployment rate of 3.8%.
But because they’re smaller, SMBs are also at greater risk of closing up shop. In 2018 alone, there were over 3,800 store closures.
For many, it’s the loss of revenues that marked the end of the line.
The last thing you want is for this to happen to your business, which is why you need new revenue streams. The sooner you diversify income revenues, the lower your risks of having to close down.
If you can’t afford these new money-making opportunities, a business loan can help.
The question is, how exactly can these loans help you increase and diversify revenues?
That’s exactly what you’ll learn here, so keep reading!
Finance the Research and Development of a New Product
Has it been a long time since you launched a new product? If so, then consider creating a new product to increase your business revenue streams.
But researching and developing a new product requires materials and more manpower. You also need to factor in trials to ensure you create a perfect, fully-functional product.
These costs will all be worth it if you come up with a product that feeds high demand though. It may also turn out to be a best-seller if it appeals to eco-conscious consumers.
What’s important is thorough, extensive research on that new product idea you have. Don’t skimp on the testing phase too, as even the smallest defect can render it unusable. Worse, it can cause injuries, which is a huge legal liability.
Keep in mind that every year, millions of people end up in emergency rooms due to product defects. In 2010 alone, over 38.5 million Americans sought medical aid for a product-related injury.
To ensure you can afford the cost of new product R&D, consider taking out a business loan. It can help you cover not only the cost of materials and labor but also the production phase.
… And Market that New Product
Regardless of how amazing your new product is, it won’t help increase profits if people aren’t aware of it. That’s why you want to build up the marketing hype even as early as the R&D phase.
You can use a business term loan for your new product’s huge-scale marketing campaign. Especially if you want to include professionally-made videos in your marketing strategies.
Now, filming the new product can no doubt make for an interesting presentation. Just look at YouTube, with its one billion hours of videos watched every single day.
But professional videos can add a considerable amount to your marketing expenditures. Done right though, it may even turn your new product into the latest viral sensation.
So, if you want to take advantage of a large-scale marketing campaign like this, go pro. And consider securing a loan to cover your expertly-curated and implemented marketing campaign.
Invest in New, Productivity-Increasing, and Much Safer Equipment
Did you know that in 2017, around 2.8 million nonfatal injuries and illnesses occurred in U.S. workplaces? What’s more, of that number, 82,730 cases led to workers having to take days off from work!
That’s loss of productivity and income right there.
Granted, many of these were due to uncontrollable events and incorrect equipment use. But many others resulted from faulty or outdated machinery.
The good news is, there are financing solutions made exactly to avoid these problems. Lenders offer business equipment loans that can cover purchases or lease of equipment.
New equipment is much more efficient, so it can also help boost productivity. Increased productivity can then boost your business profits. Fewer accidents also mean reduced downtime, not to mention happier, safer employees.
Also, the more modern the equipment, the more innovative features it has. You can then use these new features to come up with a new product or service to diversify your revenue streams.
Let’s say you’ll buy or lease restaurant equipment with more functions, say a built-in oven. With a new oven, you can start making your own hand-made bread and baked goodies.
Keep in mind that half of Americans eat sandwiches every single day. By including sandwiches in your menu, you’ll offer something that’s sure to sell. Much better actually, since hand-made foods appeal more to consumers than mass-produced ones!
Expand the Workforce
Sometimes, all it takes to diversify revenue streams is to get new people on board. These new hires can be holding talents that you can use to develop and offer a new service.
Let’s say you have a small advertising business that specializes in traditional signage. You can diversify revenue streams by adding online advertising to your offers. Which you should, by the way, considering that 56.8% of the world now use the Internet.
But to ensure your online advertising services work for customers, you need professionals. These are the new hires we mentioned above. If you don’t have the capital now to grow your workforce, a small business lender may provide you what you need.
… And the Workplace
With the new additions to your business (whether people or equipment), you’d need a bigger space. Your current facilities may no longer be enough to house these new investments. In this case, you need to scale your business by expanding your facilities.
If you own the property, you can use a loan to cover the construction costs. If you rent a commercial space, this may mean moving to a bigger space, which means new rental payments. You can take out a business loan to help pay for the new contract and moving costs.
Introduce New Items to the Inventory
A 2013 study found that half of consumers worldwide are willing to try a new product. Note that many of these folks willing to make the switch are from North America.
In a separate 2015 study, 56% of U.S. shoppers said they would stop buying from unethical companies. What’s more, a third say they would stop buying even if they didn’t have any alternative.
There’s also the 79% of Americans who say their loyalty lies in purpose-driven brands. They perceive these brands to be more concerned about consumers than traditional brands.
Whether you’re a manufacturer or a retailer, these statistics will affect you.
For starters, you want to make sure everything about your business is ethical. This includes your partners or suppliers. Even if only one of your suppliers isn’t, it may be time to switch companies.
But introducing new items or materials into your inventory can increase your costs. Aside from the possibility of manufacturing changes, you also need new marketing campaigns.
To cover these expenses, consider teaming up with a business loan lender. If you explain to them your ethics-based reasons for needing a loan, they may be more willing to approve it.
… And Ensure that the Inventory Never Runs Out
Small business financing, such as a line of credit, can help keep your inventory up-to-date. A line of credit is much like a credit card, wherein you borrow only what you need and pay back only what you borrowed. The interest rate would also only apply on the specific amount you used, and not the entire credit limit.
These solutions can be a great way to increase profits since you can use them to restock your inventory. You can allot a certain amount of it every month to replenish your stocks. This way, you can prevent losses from having to tell customers that the items they want to buy aren’t in stock.
This also helps boost customer service, since it helps ensure you can always deliver. Keep in mind that out-of-stocks lead to loss of sales, and from there, loss of profits.
Worse, experts say this issue is. After all, it has a negative impact on customer loyalty, since people don’t like it if they can’t get what they want. Out-of-stocks can cause your customers to shop elsewhere, as they can easily do online.
Prevent these from happening by ensuring you can afford to restock your inventory. A line of credit, among other financing solutions, gives you this ability.
Grow Your Business with these Ideas for New Revenue Streams
As you can see, business loans can bring a lot of new revenue streams to the table. If used right, they can also help ensure you keep your customers happy and loyal. Most importantly, they can help prevent your business from being one of the 12 closures each year.
Ready to grow your business with the right financing solution? If so, then consider applying for a new business plan with us now! We can help you get that cash you need in as little as 48 hours.